If you’re thinking of retiring to Mexico, one important question you’ll have is “How Will I Do My Banking?” Good question… wish I had a better answer. Two quick disclaimers:

1. I am not now, have never been, nor do I aspire to ever be a banker.
2. I despise Mexican Bankers, or at least most of them, and avoid having anything to do with them if humanly possible.

The only qualification I have to comment on the topic is that I’m a Gringa who lives in Mexico and has figured out a way to handle banking. Maybe not the best way, but so far it seems to work for me.

Like almost every other ex-patriot living in Mexico I do banking in both countries. Most keep their account in the U.S. or Canada, and most of the retirees have their pension checks deposited automatically. They pay bills on-line. For ‘walking around money’ they just tap an ATM. That works fine for most uses. But occasionally you’ll need larger sums. This is when it gets fun.

The banking rules change daily it seems. And evidently the banks make up a lot of their own rules. So I won’t go into many of the finer details. At this point every bank I know of in Los Cabos is requiring an FM-3 or FM-2 (resident visa) in order to open an account. You need to get that taken care of first. Some of them are also helpfully providing (and requiring you to sign in front of them and allow them to make a copy of) the U.S. IRS documentation declaring you own a foreign bank account. If you thought this was going to be a great way to hide assets, well, you’re about 20 years too late.

The banks here offer accounts both in pesos and dollars. Most individuals and businesses open one of each, keeping the majority of their funds in the more stable U.S. currency and transferring into the peso account as needed.

Once the account is open you’ll be able to wire transfer a deposit. Don’t make it overly large; large international wire transfers set off gigantic red alarms with banking authorities on both sides of the border. You’re best off to make smaller transfers, say of five or six thousand dollars at a time, until you’ve transferred enough. If you will be working in Mexico the same thing goes in reverse; if you’re sending the proceeds of a commission up to your U.S. account your pay company will break it into smaller amounts and it may be two days before they get them all in. So here’s the first caveat: ask your bank at home if they charge to send or receive wire transfers. If you’ll be retiring here be sure you can send a wire transfer without being physically present in the bank. I ended up severing a long standing (like 20 odd years) banking relationship in the States for just those reasons. Charles Schwab has banking services that I have found very ex-patriot friendly: never a wire transfer fee and never an international ATM fee. One bank I love.

I only found out today that one of my banks (BBVA Bancomer) will accept U.S. checks, as long as they are from me and deposited into my account. It takes 15 days to clear them, but this is amazing. Most banks are refusing to accept U.S. checks, and a some are even refusing cash! A frequent topic of discussion around the office is “is your bank still accepting dollars?” Yeesh. As I write this the consensus was that ScotiaBank is the only place in town still converting dollars to pesos.

If you do receive a U.S. check and want the funds to stay here, what do you do? The sound you’re hearing is MONEX riding to the rescue. Technically a bank, you establish your credentials with them and they will turn your U.S. or Canadian check into a Mexican check. Their exchange rate is the best in town, I believe. And best of all for lazy me: they’ll put the funds in my account for me and then come pick up the check at my office. Yes, you read that right. They usually give me the money before they get the check. Life is good.

Lines at the banks are notoriously long, especially on the 15^th and last day of the month when workers are paid. Even if you LOVE your banker, it’s best to come up with a plan to avoid having to go into the branch those days. I’m lucky, I have an administrator who loves to handle these things for me. Bancomer, who is one bank who seems to want your business, has set up a Preferred Customer Unit at many branches. Staffed with friendly and helpful bankers (I have to remind myself constantly that Gina is a Mexican banker, she’s so unlike her colleagues at my other banks) who very patiently explain procedures and do whatever they can to make your transaction painless. Plus, they offer a gold card that lets you skip the lines.

One last detail. The branch at which you open the account is critical. Yes, you can use the ATM or get a copy of your statement at most any other branch, but certain functions such as ordering checks can only be done at your ‘home’ branch. So pick it wisely!

As I mentioned, I’m not an expert at banking here. But I have managed to muddle my way through so far. Just like all the other ex-patriots I know. As the rules and policies change we learn and adapt. You will, too.

Carol Billups is Broker/Owner of REALTY EXECUTIVES Los Cabos. You can read more of her articles on www.reloscabos.com.

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© 2009 Carol S. Billups